Thomas H. Jones, MD
Neurosurgeon and
Medical Director,
Santa Barbara
Neuroscience Institute



Dear Colleagues,


Over the past year, among the most common phrases spoken by hospital administrators and their medical staffs, at least in California, has been "physician alignment." Such a short phrase with such a complex and ambiguous meaning. It seems to me, more likely than not, that the legal entanglements of such hospital- physician collaboration will take years to work out.


On a simplistic level, however, I think that most physicians would like to work with their community's hospitals now to improve the quality of the medical care and, at the same time, help drive down the cost of care.


In Harvard Business Review's "Fixing Healthcare from Inside and Out," Jon Meliones, MD, as chief medical director of Duke Children's Hospital (DCH), writes about how they turned their net margin of $11 million in the red to $4 million dollars in the black and cost per case from $14,889 to $10,500 in just three years. "They" refers to groups known as "clinical business units" consisting of individual service line invested clinicians working with equivalently subspecialized nurses, therapists, social workers and administrators.



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They created this impressive clinical turnaround by borrowing from industry. The "balanced scorecard approach" was developed by Kaplan and Norton for Fortune 500 companies and divides attention among four equally important quadrants: 1) financial health; 2) consumer satisfaction; 3) internal business procedures; and 4) employee satisfaction. Meliones and his co-workers first looked at "best practices" and used those to develop clinical pathways and from there put in place teams called "clinical business units."


Within these units the head administrator and physician share responsibility which includes review of financial information as well as patient and staff satisfaction. To obtain traction, Meliones writes, "developing and implementing a balanced scorecard is labor-intensive because it is a consensus- driven methodology. To make ours work required nothing short of a pilot project, a top-down reorganization, development of a customized information system and systematic work redesign."


One referenced example of a programmatic change began with the simple observation that babies recovering from heart surgery had feeding problems and that parents had to learn how to feed them. After the decision was made to move up the day parents were taught how to feed their infants from the last hospital day to the day following surgery, children were discharged earlier and attendant hospital costs were reduced 28 percent.


Dr. Meliones states that "overall, the results we've achieved at DCH.... were stunning." By using multiple clinical pathways and improving communication with patient's families and staff, he noted, customer satisfaction jumped 18 percent, length of stay dropped from 7.9 to 6.1 days over four years, readmission rates fell from 7 percent to 3 percent, and employees noted a 45 percent improvement in job satisfaction.


Whether we, as a medical staff and hospital, choose the "balanced scorecard approach" or some other iteration is probably not as important as recognizing the urgency of working in organized practice units with the goal of improving the care we are delivering and lowering the cost of such care.




Tom Jones, MD





Thomas H. Jones, MD
Executive Medical Editor


Philip Delio, MD
Medical Editor, Neurology


Alois Zauner, MD
Medical Editor, Neurosurgery


Sean Snodgress, MD
Medical Editor, Neuroradiology



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